Startup India

Famed investor Mark Cuban hits out at Uber, says this is the reason why its IPO failed

Uber's competitor Lyft, which went public in March this year, had a poor IPO too. Mark Cuban, who invested in Lyft, believed that the company waited too long for listing.

Mark Cuban said that Uber is not a growth company and that he could not have expected anything different from its IPO. (Image: Reuters)

Famed billionaire entrepreneur, investor and one of the judges at Shark Tank (Emmy Award-winning reality show for startups) Mark Cuban is not surprised by Uber’s lacklustre IPO since they not just waited but waited too long to hit the stock exchange.

Mark Cuban came down heavily on the poor IPO by the ride-hailing giant. Uber “waited too long. There’s nothing exciting about it,” the co-owner of NBA’s Dallas Mavericks told CNBC.

Mark Cuban said that Uber is “not a growth company” and he couldn’t have expected “anything different.” Despite nine years in business Uber still has to buy its revenue. That’s not a good sign, Mark Cuban added.

Uber’s competitor Lyft, which went public in March this year, had a poor IPO too. Mark Cuban, who invested in Lyft, believed that the company also waited too long for listing.

Another Shark Tank investor and owner of Canadian investment fund manager Kevin O’Leary criticised Uber for being “value-less and not having any cash flow”. “It’s no different than putting your money down on Red or Black in [Las] Vegas and giving money to one of these losers,” O’Leary told CNBC.

Uber CEO Dara Khosrowshahi had written a memo to its employees post the dull IPO and drawing parallel with Facebook and Amazon’s IPO to encourage them.

“During times of negative market sentiment, the pessimistic voices get louder, and the optimistic voices pull back,” the memo read. “Remember that the Facebook and Amazon post-IPO trading was incredibly difficult for those companies. And look at how they have delivered since. Our road will be the same,” he said in the memo, published on multiple media platforms.

Uber saw an erosion of its market value by $16 billion as its shares went down nearly 20 per cent below the IPO price of $45, Bloomberg reported on Tuesday. Its current market cap stands at $71.86 billion.